In a move likely to infuriate beer lovers around the world, landlord and landlady Peter and Debbie Gibson have been suspended for serving pints ‘too full’ of beer.
Peter and Debbie, who have run the Junction Inn in Greater Manchester, England, for 12 years were ordered to close the pub on New Year’s Eve of all days, the Mirror reports.
Brewery owner Humphrey Smith showed up and, in front of all the customers, told the Gibsons that he was shutting the Junction Inn because the heads on the pints of beer were not big enough.
The couple said they were told they owed brewing firm Samuel Smith $15,859 in lost stock for topping up costumers’ beers.
“It’s disgusting they’ve been treated this way,” their daughter, Lisa Gibson Hunt, told The Mirror.
“They’ve worked for Samuel Smith’s for 16 years. They’ve never been down in their stocks, they’re just not reaching the stock targets the brewery wants, it’s not right.”
31 Jan 2012
Pub landlord suspended for serving pints “too full” of beer - Yahoo!7
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Pubs’ poor prospects are turning the corner - FT.com
There are, of course, cyclical factors. My local’s takings started to fall off a year ago, getting worse from the midyear as the economy stalled. But it is on the fringes of the City and its customers are financial folk, lawyers and staff from the nearby teaching hospital. If they are short of the price of a pint, then we are all in trouble.
The real malaise is deeper. Aside from one-off shocks such as the smoking ban, it comes down to two factors: the price gap between the pub and the supermarket, and the malign structure of the pub industry. In both respects, there are glimmers of hope. The price gap mainly reflects a hard economic fact. Productivity gains are a lot easier to come by in manufacturing – brewing, in this case – than in a labour-intensive service industry such as the pub trade.
In 2010, the price of beer in UK supermarkets and off-licences was lower than it had been in 1998. Over that time the pub price rose by almost half.
That gulf has had a predictably dire effect on some pubs’ marketing strategies. If they invest in live TV coverage of the big matches, the young target customers increasingly respond with so-called “pre-lashing” – knocking back an advance dose of cheap supermarket drink at home, then nursing a single pub pint through the match itself.
There is more. A village I know in rural Shropshire has two pubs, one owned by the landlord and the other by franchisees of a big pub chain, or pubco. The first prospers, while the latter has had three landlords in the past decade, at least one of whom went bust.
The landlord of the first pub tells me why. As a sole trader, he can buy his beer for much less than the pubco charges the franchisee.
This is economic nonsense. Pubs are not standardised outlets like McDonald’s but quirky one-offs. The main thing a multiple owner can contribute is lower inputs through centralised buying. The pubcos do the reverse. Why? Because of leverage. The sad history of the industry has left almost all the pubcos with balance sheet gearing much higher than real estate developers or cyclical retailers, the two industries they most resemble.
Observe the results. A decade ago Whitbread, a big, old established brewer and pub operator, switched its entire business into hotels and restaurants. Its pub chain was bought by a pubco, Enterprise Inns. Today Whitbread has a market value of £3bn, book equity of £1.2bn and net debt of £500m. Enterprise stands that on its head: net debt £3.1bn, equity £1.4bn and market value £175m.
To put that in perspective, more than a fifth of the UK’s 51,000-odd pubs are owned by two companies, Enterprise and Punch Taverns. Their combined debt is £5.4bn and their market value £250m. In other words, a large chunk of the nation’s pub estate is a commercial disaster area.
In a fast-changing market, this is bad news. A company preoccupied with juggling billions of debt is unlikely to respond well to events on the ground. That was supposed to be the job of the franchisees and lessees. But they are crippled by the costs resulting from that debt.
Let us now turn to the good news. Last year, for the first time in at least two decades, off-sale beer prices rose in line with pub prices. By the year end, they were rising faster.
Also last year, pub beer volumes fell less than off-trade sales for the first time since 1996. And last year’s pub closures, while still high, were less than 2 per cent of the total compared with a peak of 4 per cent in 2009.
Meanwhile, some of the biggest pubcos are distressed sellers of their pub estates. So smaller, more agile operators with fresh ideas are starting to take their place.
There is also a resurgence in local microbreweries. In the Shropshire case, a new locally produced cider has driven the leading national brand off pub counters. And crucially, such products are turned out in volumes too small to be of use to the supermarkets.
In other words, market forces are finally starting to reassert themselves. The British pub is changing, in ways an old codger like myself might not appreciate. It may be turning the corner just the same.
Taxes Killing The British Pub
Falling UK pub beer sales demonstrate the pressing need for a change in government beer tax policy, according to the British Beer and Pub Association (BBPA).
The BBPA's latest "Beer Barometer" shows that beer pub sales fell by 3.4% in 2011, with off trade sales down 3.7%. In addition, the year saw 9,000 job losses in the beer and pub sector. The figures have led the BBPA to urge the government to reconsider its tax policy, and to argue that changes could help create 5,000 jobs in 2012. BBPA figures show that beer sales support around 1m jobs and generate nearly GBP8bn (USD12.6bn) in tax revenues.
Beer duty was increased by 7.2% in Chancellor George Osborne's March 2011 Budget. The total increase in beer duty since March, 2008 stands at 35.4%. The BBPA maintains that the industry's decline could be halted - and thousands of jobs saved - if the government abandons what it believes are damaging plans for additional, above-inflation rises in beer tax in the March Budget. The government’s beer tax ‘escalator’ policy means increases of 2% above inflation until 2014/15.
Brigid Simmonds, Chief Executive of the BBPA, commented: “The decline in beer sales has slowed, but these figures show the sector cannot afford another round of inflation-busting, beer tax hikes in the Budget. This will delay any potential recovery in an iconic and economically vital British industry. A change of course, giving brewers and pubs a chance to invest and expand their operations, could create over five thousand jobs in 2012 which should be a great year for British beer and pubs with the Queen’s Jubilee, [the] Euro 2012 [soccer championships], the Olympics and Paralympics. These events could provide a real boost for the UK economy and boost employment - but this will only be possible if the government reverses planned tax increases and damaging over-regulation.”
Earlier this month, leading pub chain JD Wetherspoon joined the campaign to lower the rate of value-added tax (VAT) charged in pubs and restaurants from 20% to 5%. Releasing its latest interim figures, Wetherspoon argued the government must act on this as a priority, in order to maximise job creation and tax revenue. The chain argued that, with supermarkets not required to pay VAT on food, and with similar businesses in Ireland and France facing lower tax rates, the UK's pub and restaurant industry is at a disadvantage.
The VAT Club campaign is led by French lobbyist Jaques Borel, and big names including the British Hospitality Association, the British Association of Leisure Parks, Piers & Attractions, the Federation of Small Business and the Tourism Alliance are also involved.
Osborne will deliver his 2012 Budget on March 21.
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